Report: Costs of solar panels plunge; returns freeze

It has long been speculated that for the solar power industry to really take off, the cost of photovoltaic panels needs to drop. According to a new report, this trend is finally happening, with uptake doubling every couple of years, while the price dropping by 19 percent.

The Clean Energy Trends 2013 report, by renewable energy analysts Clean Edge, said: “Solar photovoltaics (including modules, system components, and installation) decreased from a record $91.6bn in 2011 to $79.7bn in 2012 as continued growth in annual capacity additions was not enough to offset falling PV prices. While total market revenues fell 19 percent – the first PV market contraction in Clean Energy Trends’ 12-year history – global installations expanded to a record of 30.9 GW in 2012, up from 29.6 GW the prior year.”

While this may be good news in terms of market size, the industry has seen a drop in revenue of $12bn in 2012 to just under $80bn, as a result of the falling price. Clean Edge founder Ron Pernick told the Guardian that the current cost of solar, at $2.50 per watt, is just above the $1.50 per watt he thinks is the “holy grail” for the industry.

The report adds that Germany was the leading market for the solar industry, with China following close behind, and they estimate that the global industry will grow to more than $120bn within the next ten year: “Germany remained the top market, adding 7.6 GW in 2012, followed by strong growth in China, Italy, and the US, which each added more than 3 GW. By 2022, solar PV revenues are expected to grow to $123.6bn.”